For most employers at any given time, between 10% and 20% of employees and dependents are facing a variety of issues that can create symptoms of stress, anxiety, and/or depression. How they handle these symptoms will have a direct effect not only on their personal lives, but also on their labor costs (through job performance issues, disability claims, increased utilization of medical services, and the cost of prescription drugs). The assistance and treatment that those experiencing these issues receive will determine the financial impact to the employer.
In the past five years, health care costs have risen more than 50%, with annual increases of 13% to 14% in 2001 and 2002. Disability claims for stress and depression are on the rise. Productivity is being negatively impacted.
As reported in the Wall Street Journal, a study published by the Health Enhancement Research Organization surveyed over 46,000 workers at six major U.S. employers and reported that over 20% of all employees screened as highly stressed or depressed, and their medical claims averaged almost 49% more than the other 80% (not in that identified group). Drug trend reports underscore the problem of antidepressants. They are the most-utilized class of all prescription drugs and the second-highest drug expenditure category. The Dec. 21, 2003, Wall Street Journal reports that pharmaceutical costs for depression increased 425% from 1990 to 2000 while, during the same period, inpatient costs decreased 33.6% and outpatient costs increased 46.9%. As employers look for ways to cut costs, mental health benefits become an easy target.
Consider these facts from Prozac Nation, Employee Benefit News (2002):                New research shows that the number of Americans receiving treatment for depression soared nearly four-fold between 1987 and 1997, from 1.7 million to 6.3 million.        In terms of revenue, three of the top eleven prescription drugs in the year 2000 were antidepressants.        
The article also stated the following:                “Many patients seek treatment for a short-term and end up with long-term drug therapy.        “We know that 50% to 60% of patients with depression receive their treatment from primary care physicians. Unfortunately, too many of these doctors don't have either the skills or the time to detect the presence of depression among their patients.”        “The best treatment for major depression is a combination of drug therapy and psychotherapy, but many patients receive pills alone. Depression management programs should coordinate services through employee assistance programs [‘EAPs’] and health care plans.”        
The overall results of a three-year study published by Abbott Laboratories reported that total healthcare costs averaged approximately $2,200.00 less per year for patients (and family members) whose mental health treatment was managed by an EAP vs. patients whose mental heath treatment was managed by a medical UR (standing for Utilization Review). The savings were realized even though patients in the EAP managed group averaged approximately $750.00 more pretreatment episode for mental health care than the patients managed by the medical UR. This study documents that it is actually more costly to suppress mental health care. Appropriate treatment is a cost savings tool. Stress, anxiety, and depression are increasing overall healthcare costs at a rate much greater than the costs of providing effective treatment. Add productivity and disability losses to the equation and the costs become even greater.
During the past five years, healthcare costs have risen more than fifty percent. Even with numerous valid studies documenting the impact and costs of mental health issues on labor costs (including healthcare), many employers, brokers, consultants, and TPAs (standing for Third Party Administrator) fail to realize the extent of the problem and, as a result, continue to oppose “mental health parity.” While parity on its own is not the answer, the denial of the existence and impact of mental health issues among employees can be costly for the employer.